To qualify for ERC in 2020, businesses must have paid qualified wages to employees from March 13, 2020, through December 31, 2020. To qualify for ERC in 2021, businesses must have paid qualified wages to employees during the period of January 1, 2021, through September 30, 2021.
You may qualify for an ERC loan if you have a valid and verifiable ERC claim filed with the IRS. In most cases, lenders will not look at factors like personal credit score or business revenue, but this varies based on the company you opt to work with.
If you have questions about the employee retention credit, you’re not alone. That’s why we’ve created this employee retention credit FAQ guide to answer all of your questions.
Unfortunately, there is no way to expedite the ERC refund process. You can avoid potential delays by ensuring that your Form 941-X is filled in correctly, including ERC refund calculations. You may also reach out to reputable ERC funding companies to learn about ERC advances and funding programs, although fees will apply.
The employee retention tax credit, or ERC, is a real tax credit available to qualified small business owners. This refundable tax credit could be filed on quarterly returns in 2020 and 2021. Small business owners that didn’t know about this credit can retroactively receive a refund by filing amended tax returns.
During an IRS audit, the IRS will notify you of the specific information you need to submit. However, some common documentation that you may be required to submit include payroll records, accounting records, PPP loan forgiveness documentation, and documentation that shows your business was fully or partially shut down by the government or proof of a decline in receipts.
Any small business that experienced fully or partially suspended operations due to COVID-19 or a significant decline in gross receipts qualifies for the ERC.
Qualified wages are wages that will be under consideration when you apply for the ERC. They are wages paid between March 15th, 2020 and September 30th, 2021. The period for qualified wages does extend beyond the September deadline for certain businesses.
If you didn’t take advantage of the Employee Retention Tax Credit during the COVID-19 pandemic, eligible small businesses can now retroactively claim the credit by filing an amended tax return via IRS Form 941-X.
Yes, it is possible to receive the employee retention credit even if you’ve received a PPP loan. However, you can’t claim the ERC for any portion of wages used to qualify for the PPP loan or PPP loan forgiveness.
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